FE-Score™ is the first-of-its-kind scoring system that boils all the financial data down to a single number to rate the investment potential of every property. You know instantly how each property compares to the others, without pulling your hair out. The score is calculated based on the ASKING price of a property, relative to all of the other data (thousand of financial and market trend variables, too many to mention).
The idea was to apply the FICO® Score concept to real estate. Everyone knows, the higher your credit score, the better 'risk' you are for creditors. Residential real estate has a different set of variables, but otherwise the concept is the same… the higher the score, the better. If you have a property with an FE-Score™ of 850+ score you've got a great deal.
The FE- ScoreTM uses a fixed scale as compared to grading on a curve. “Good is good” and “bad is bad” and no amount of curving should cause a good to look bad or a bad to look good. Sometimes it is better to be in a cash position instead of investing in anything else.
The meaning of the value of the FE-Score™ is currently broken down as follows:
850+ -- great deal, stars are perfectly aligned
700-850 -- potential, possibly good deal
600-750 -- generally a poor deal, but depending on your situation and needs, you might want to consider it
450-600 -- not likely
250-450 -- absolutely not (as an investment)
< 250 -- properties best purchased as your dream home that you intend to live in (the rest of your life) and cost is not an issue
Here's the current FE-Score breakdown based on our current analysis of US inventory:
How the FE-Score™ is calculated is a trade secret and cannot be revealed. Sorry, but you'll get the same answer if you ask Coca-Cola for their secret formula.
Remember, FE- ScoreTM results DO NOT factor in the physical condition of a property.
FICO® Score is registered trademark of Fair Isaac Corporation.
